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Tsunami Alert: Largest Postage Increases Ever Will Cost $Millions!

Posted by BrettDashwood on December 8, 2015

Tsunami-Evacuation-Route_225x377.jpgThe single largest change catalyst in the high-volume personalised customer communication space is about to happen in Australia.

Will this tsunami wash over you, or destroy your customer communication budgets and processes?

It’s All Go!!

The Australian Competition and Consumer Commission (ACCC) has now announced that they will not object to Australia Post’s proposed postal price increases, effective 4 January 2016.

Once these increases happen, more than $1,000,000 extra could be spent for every 100,000 customers on customer communications, per year, every year.  Specifics for PreSort Letters are highlighted in the table below.

Evidence shows that customer communications could already be costing $millions per 100,000 customers, and in our experience at least 10% to 30% of this spend is usually waste.

Since the notification in August by Australia Post proposing the postage price increase in October 2015, and then the massive hit in January 2016, businesses have reacted differently with comments like:

  1. Are you sure those numbers are right and that prices will go up that much?
  2. I guess it is what it is and we’ll just have to increase our prices to compensate.
  3. How could they do that with such short notice, we haven’t budgeted for that?!
  4. This will kill the printing and mailing industry, how can Australia Post want that?
  5. I guess they’ll lose a lot of our business, we’ll just go “e” delivery!

While views vary, it’s the fifth comment, “we’ll just go ‘e’”, which needs serious consideration.

Going “e” isn’t easy...or cheap!

Over the years, many businesses have tried different methods of using electronic (or simply “e”) delivery for their (typically transaction document-based) customer communications:

  • Include document content in the body of an email
  • PDF version of the printed document attached to an email
    • The email being simple text or maybe an HTML-based summary
  • A short (often text) email with a link to the website:
    • directly to their document
    • to login to their secure area
    • simply to the website (visitor needs to then locate the secure area
  • An SMS to indicate the document is available online

But of course print & mail still needs to be used for a majority of communications – it’s simply the medium that a majority of consumers wish to retain.

“I love the ease, flexibility, and choice that email and online offers me, however I still want the choice to get things in the mail when that is best for me.”

“Why do I have to have one or the other? If they want my business, surely I can get communicated to how and when I want to be communicated with. If I want an email or SMS with online access, great, but that doesn’t automatically mean I don’t want it mailed too!”

These are similar to the sentiments that many consumers have, and this is backed up by the lack of significant uptake of e-delivery for essential mail.

Many businesses will know about the Australia Post postage increases, but some won’t “get it” until they receive their postage invoice for January or February next year.

In our recent article, What is the Cost Impact to You? we included downloadable pricing comparison tables for PreSort Letters and Print Post.  But to spell it out a bit more, here is a postage price increase table to help you understand the true impact these changes will have on your business from January 2016.

# Customers Communication Frequency # Annual
mail items
*Estimated postage
increase as proposed:
March 2015 to January 2016
50,000 quarterly 200,000 plus $48,000 / year
monthly 600,000 plus $144,000 / year
weekly 2,600,000 plus $624,000 / year
100,000 quarterly 400,000 plus $96,000 / year
monthly 1,200,000 plus $288,000 / year
weekly 5,200,000 plus $1,248,000 / year
500,000 quarterly 2,000,000 plus $480,000 / year
monthly 6,000,000 plus $1,440,000 / year
weekly 26,000,000 plus $6,240,000 / year
1,000,000 quarterly 4,000,000 plus $960,000 / year
monthly 12,000,000 plus $2,880,000 / year
weekly 52,000,000 plus $12,480,000 / year

*Based on Australia Post’s proposed PreSort Letters Small Letter rate on the Regular timetable

Mail-with-dollars_150x600.pngDon’t make a rash decision!

It’s important to make a decision about how this important area of your customer experience strategy will pan out moving forward, but take care if making a decision based on cost alone.

Too many times we see businesses make strategic (expensive) decisions based on incomplete or inaccurate information.  The areas where they don’t know what they don’t know, can cost big time and dollars, and lead to significant ongoing waste, especially if they realise later and have to back out a solution and replace it.

Before your business spends 100’s of $1000’s or even millions of dollars, make sure that you are aware of the 13 Critical Functions you must know, to help you decide about managing these processes in-house or outsourcing.

You don’t need to be the next example of an organisation with a large volume of customer communication, that would like to have ‘their time over again’.

If you need assistance during this process, we’re here to help, BEFORE you go too far!

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